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The Mixed Co-operative was set up with a share capital of 7.5 million euros on 12 February, with the following holdings: members 2.25 million, the Aurrenak co-operative 2.25 million, whose activities complemented those of Loramendi and MCC Inversiones 3 million. It is planned for Loramendi to become a first-degree co-operative within 10 years, that is to say that it will then be owned exclusively by the worker-members.

Once it had been decided to turn the company into a co-operative and the 7.5 million euros of share capital had been put up, a redundancy programme was started based on the actual market requirements. 30 workers were made redundant with the best compensation terms possible, including a return clause. The workers themselves also decided on an average wage reduction of 10% this year.

For 2004 the Feasibility Plan contemplates sales of 26 million euros, rising to 32.6 million euros in 2006 and 43 million euros by 2008. International sales will account for 80% of total sales over the period. This increase in sales will be based on: • a recovery in core-making line sales, which account for 50% of total sales and where Loramendi is the world leader. • A strong boost in the sale of individual machines with automation fitted. • The promotion of vertical moulding lines. • Commercial and product synergies with Aurrenak, which will enable joint lines (including tooling) to be offered that no other manufacturer in the world can build. There will also be synergies with other co-operatives in the MCC’s Engineering and Capital Goods Division, which Loramendi now belongs to. • The promotion of subcontracting. • The strong boost to be given to the aeronautics business, started just two years ago, where it is planned to increase the current volume of sales. • Likewise, internationally the company has its own sales network in United States, Mexico, Germany, France and China and the support of the MCC, with a lot of experience abroad, including its management systems.

As far as profitability is concerned, the company will be close to the break-even point this year. It will surpass it in 2005 and, from then on, the plans are for a continuous improvement aimed at achieving 5% over sales by 2008.

Loramendi’s main clients are the leading car manufacturers with integrated foundries in United States, Mexico and Brazil -General Motors, Ford and DaimlerChrysler-, and other manufacturers like Caterpillar, Nemak, Cifunsa, Teksid, etc., an area in which there are 250 of their facilities. In Europe, its main clients with integrated foundries are: Mercedes, BMW, Volvo Trucks, Scania, Volkswagen and Renault, and other manufacturers like Bruhl, Ederlan, Luzuriaga, Halberg, Fritzwinter, etc. It has operations in progress in China, South Africa and Japan, and is keeping a close eye on what is happening in Russia and other Eastern European countries. In the aeronautics field, the main client is Airbus.

An optimistic sign is that there has been a significant recovery in the order books, which are currently in line with the plans. In 2003, the order books were already 50% higher than in 2002.
 
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